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Tuesday, September 8, 2009

Families who fail to get health insurance could be fined up to $3,800 under a health care reform plan proposed by a top Senate negotiator.

Sen. Max Baucus, D-Mont., who as chairman of the Senate Finance Committee is leading talks among the "Gang of Six" senators to hammer out a bipartisan compromise, offered what he described on Tuesday as a "framework" and not a "final product."

But the detailed proposal comes just days ahead of a self-imposed Sept. 15 deadline for such a deal. Baucus is pushing his committee members hard to hammer out a bill, and those details come as strong suggestions.

The framework, a copy of which was obtained by FOX News, includes what amounts to a no-choice option. It would make health insurance mandatory, like auto insurance.

The plan would provide tax credits to help small employers and help cover the cost for households making up to three times the federal poverty level. That's about $66,000 for a family of four, and $32,000 for an individual.

Those who still don't sign up would face hefty fines, starting at $750 a year for individuals and $1,500 for families -- for those making up to three times the poverty level.

For those who make more than that, the penalty on individuals would jump to $950 and the penalty on families would jump to $3,800.

There would be a few exemptions, including for Native Americans and for those making incomes below the federal poverty level.

The plan does not include a government-run health insurance plan to soften the blow of the coverage mandate.

Instead, Baucus opts for a system of non-profit cooperatives, as part of a broader health insurance exchange.

As a way to pay for the package, estimated to cost under $900 billion over 10 years, Baucus is proposing a 35 percent excise tax on insurance companies for high-cost plans -- defined as those above $8,000 for individuals and $21,000 for family plans.

The Senate Finance Committee is meeting Tuesday, as President Obama prepares to deliver a high-stakes speech to both chambers of Congress Wednesday night in a bid to invigorate the push for reform.

Four committees have already passed their bills; Baucus' panel is the only one yet to act. His committee's bill is also the only one that could be considered bipartisan.

Baucus hits major elements in his plan that other top Democrats say are important. His plan would require health insurance plans to guarantee coverage and would prohibit them from excluding coverage based on pre-existing conditions.

Premiums would be allowed to vary based only on tobacco use, age and size of family.

But the fines pose a dilemma for Obama. As a candidate, the president campaigned hard against making health insurance a requirement, saying it's too expensive to mandate. White House officials have since backed away somewhat from that stance, but there's no indication that Obama would support fines.